S&P 500 Performance 2025 Highs Met With A Shaky 2026 Start

The party might've hit a temporary lull. After a stellar year where the S&P 500 advanced more than 16%, the first trading session of 2026 closed out a lackluster week for stocks. Investors are now grappling with a divided Federal Reserve and the hangover of 2025's massive gains.

Analyzing S&P 500 Performance 2025 and the 2026 Shift

Friday marked the end of 2026's first week, and it wasn't the opening act many hoped for. The Nasdaq shed 1.5% while the S&P 500 edged 1% lower. According to Reuters, it's unclear what exactly triggered the slide, but minutes from the Federal Reserve's December meeting showed that officials were deeply divided over their recent 25-basis-point rate cut.

The decision was approved on a 9-3 vote, the most significant internal dissent since 2019. This friction suggests that future rate cuts aren't a guaranteed slam dunk, especially as Donald Trump's trade policies and potential tariffs loom over the 2026 economic landscape.

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AI Infrastructure Winners vs. SaaS and Retail Laggards

Looking back at the winners of 2025, it's all about the hardware. GE Vernova skyrocketed 98.7% because it builds the natural gas turbines fueling the AI data center boom. Corning wasn't far behind, gaining 84.3% thanks to its specialty glass partnership with Apple and the shift toward fiber optics in AI infrastructure.

However, the software side struggled. Salesforce plummeted 20.8% in 2025 as AI automation threatens seat-based business models. Nike also stumbled 15.8% amid challenges in China. Elliott Hill's recent $1 million stock purchase suggests internal confidence, but the retail giant still has a mountain to climb.